Implementation of the power purchase agreements (PPAs) signed recently for 2200 MW of solar power under different schemes of the central and state governments have come to standstill after the anti-dumping duty recommended by the Directorate General of Anti-Dumping and Allied Duties (DGAD) on import of solar cells/modules from China, US, Malaysia and Taiwan from US $ 0.11 to $ 0.81.

In
a note submitted to the Finance Ministry by ASSOCHAM, it has stated
if the anti-dumping duty was imposed, the project cost will increase
by 18.83% on minimum side, while it may increase by 75% on maximum
side.

In
Focus

The
resultant corresponding revised tariff will be INR 9.1/kWh and INR
13.51/kWh respectively against INR 7.72. /KWHr in CERC award.

ASSOCHAM
Secretary General D.S. Rawat said, if we consider another 17,000 MW
to be installed to achieve, the proposed anti dumping duty implies
increase in total project costs by almost Rs. 22,120 crore to
Rs.87,500 crores. This would also lead to similar cost hikes for the
distribution companies or the government will have to bear this
increase in cost of generation of power. This increase in cost of
generation of power would ultimately imply increase in the cost of
power to the public at large.

The
proposed anti dumping duty (ADD) would increase costs all around,
thus negating all the efforts made so far. Generation
cost of power by developers is a "pass through activity" and
ultimate impact comes to the power distribution companies (mostly
govt. owned) and thereby on the energy consumers.

Currently
India has projects worth 2500 MW and the there are additional 2200 MW
under implementation in various states of India under various schemes
floated by the state and central government. This is a particularly
exciting time for the industry as with the momentum build up through
the last three years the Solar power tariff has reached a reasonable
and rationalized level which is halved from the prevailing rates of
Rs 16-17 per unit.

This
was the major justification which allowed the State utilities to
announce projects to meet their renewable purchase obligation (RPO)
requirements hence expanding the solar power projects potential in
India. With increasing affordability and expanding opportunities we
are almost certain that the solar power is very close to achieving
grid parity well before 2017.

However,
the anti-dumping duty will have significant impact on the cost of
solar power generation that will threaten to derail the growth
momentum of the sector built up over the last three years and grossly
undermine the investor confidence. Needless to say that the rising
cost of solar power will seriously damage the key objectives of
creating the foundations of energy security and efforts for ensuring
electricity for all.